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Something To Think About While It Snows

It’s snowing and I’m kind of bored, so I start worrying about you and your business.

If your company is like most, your Employee Handbook (a must) and/or your Code of Conduct (another must) contain boilerplate provisions that restrict your employees’ ability to report fraud, waste, or abuse to appropriate investigative authorities.  Last quarter, the U.S. Department of Defense issued a new rule that prohibits it from contracting with firms that require employees to sign confidentiality agreements that restrict whistle-blowing.  The U.S. Environmental Protection Agency, General Services Administration, U.S. Agency for International Development, and the Department of Veterans Affairs are implementing similar policies.

These restrictions look like they will flow down to all subcontractors at all levels, so if you are anywhere in the supply chain for a government contract, it is time to review your employee confidentiality agreements, handbooks, and codes of conduct.  Also, as a bidder on any level of government work you can be asked to represent or even certify that your agreements fully comply with this and all other government imposed rules.

Once again we have a noble goal that creates additional burdens and hidden pitfalls for those who do business with the US Government or government contractors.  Of course, most of you are probably thinking that no one would ever make an employee agree to what amounts to a cover up, so where is the issue?  Who would do such a thing?

Let’s look at that a bit closer.  Most companies have generic confidentiality agreements or confidentiality provisions in their employee handbook that forbids the disclosure of “all non-public proprietary and confidential information, including without limitation….”, or some similar language.  Under the new rules, a clause like that gets you into trouble.

Unless your handbook or employee agreements specifically “carve out” this type of “whistleblower” reporting from any confidentiality obligations, you may have a problem.  In order to correct this perceived ambiguity, employers will not only have to change the language in the handbook and/or agreements, employers also could be required to affirmatively notify your employees that any possible restrictions on whistleblower reporting are no longer in effect.

“We did not update our handbook.  What can happen to my company?”

  • If you are bidding for work as a contractor or subcontractor, your company runs the risk of not being awarded the bid.
  • If you are awarded a contract, a competitor can file a bid protest with the government or point out to your government contractor customer that you are in violation and the award can be rescinded.
  • If you win the contract and through post award audit, due diligence, or a whistle blower report, it is discovered you are not in compliance, your contract can be terminated for default or breach of contract.  Remember – you stated in your contract that you comply with, and will continue to comply with, all applicable government rules.
  • If funds are flowing directly to you from a government contract, you can be charged under the False Claims Act for submitting a false claim.

Clearly, this level of risk and exposure far outweighs the cost and effort required to amend your policies, handbook, and employee agreements needed to bring the company into conformity.  We therefore advise all of our clients who work with defense or civilian government agencies, or those that subcontract to companies that do, to promptly examine their personnel policies, handbooks and personnel manuals, as well as employee confidentiality agreements, to avoid the serious risks created by these new rules.

Any company can significantly lower the risks of having a whistle blower situation if you have an internal hotline or helpline.  If you have any questions or need any help, give me a call.



SilvermanAcampora Employee Honored by Long Island Cares’ VetsWork Program

On November 4, 2015 at its 2015 Harry Chapin Humanitarian Awards dinner, Long Island Cares honored Rodolfo “Rudy” Bahenarodriguez, a team member in SilvermanAcampora’s General Services Department, for his successes in its VetsWork Program. Rudy served for 21 years in the U.S. Army, retiring from the 101st Airborne Air Assault “Screaming Eagles.” Rudy supports his wife and his 4 children, as well as retiring from the 101st Airborne Air Assault “Screaming Eagles.” Rudy supports his wife and his 4 children, as well as retiring from the 101st Airborne Air Assault “Screaming Eagles.” Rudy supports his wife and his 4 children, as well as